Kansas Title Loan Laws

People are funny when it comes to finances. A large majority of folks will do their best to read through contracts, ask questions and research before making financial decisions. However, at the same time, there are huge numbers of folks that don’t know how to research loans, cannot be bothered to learn about interest rates or don’t have the slightest idea how the loan process works. Yet, these are the folks that are eager to put their signature on loan contracts. For example, auto title loans are gaining in popularity, and many people assume they all have the same requirements and loan terms regardless of the lender. Unfortunately, this isn’t necessarily the case. Each lender may have their own requirements and terms, which can be important to borrowers. Some lenders require auto insurance, the keys to your car or proof that you have income. In addition, each lender must follow state regulations where they do business. On the surface, auto title loans may sound like a good deal and they can be if you do your research and take out a loan responsibly. If you are in the market for a small loan, you should learn about title loan requirements, how title loans work, title loan regulations in Kansas and how repossession laws come into play.

What Are Car Title Loans?

In many instances, car title loans have replaced personal loans and lines of credit from traditional banks because they are easier to get. You can obtain title loans from loan stores in just about any city, and there are a number of lenders doing business online. These loans are typically short-term loans, which are secured using the auto title to your vehicle. In order to operate legally in the state of Kansas, title lenders offer title loans as open-end loans and will place a lien against the auto to use as collateral. Liens are removed after the final loan payment has been processed, and paper car titles are returned to borrowers.

According to Kansas title loan laws, acceptable vehicles include any device used as transportation on public highways, which could include vehicles like trucks, cars, RVs and motorcycles. Providing collateral to secure the loan helps to assure title lenders of less risk when approving loans. In some situations, lenders are also able to obtain more competitive interest rates because loans are secured.

Why Are Title Loans Gaining in Popularity?

Convenience - Many people do not want to take time off from work to sit in a bank filling out long applications, supplying endless amounts of documentation and waiting weeks to learn whether their loan was approved.
Easy Loan Approval - Most applicants applying for car title loans are rarely turned down. A cash loan is almost guaranteed for all title loan applicants. Credit checks are not a condition of loan approval with most title lenders. Therefore, even those with the worst credit scores can easily be approved for loans.
Fast Cash - People do not want to wait for weeks to receive loan payouts. Most title lenders payout loan funds within 24 hours or less after receiving applications.
Hardship Cases - Since the last recession, many folks are still facing extreme financial problems. Job losses and higher costs of living have made it almost impossible for some folks to make ends meet. When there isn’t enough money to pay all the bills, people miss payments and damage their credit ratings to the point where they can’t get financial aid from traditional loan sources. Often, title loans are the last option for cash to keep a roof over their heads and food on the table.

How Title Lenders Determine Loan Amounts

Loan amounts per customer may vary significantly. They are determined by the market value of your automobile. Typically, older autos rate lower loan amounts. However, newer autos in relatively good shape with fewer miles can qualify for large loan amounts. Most car title lenders rely on Kelly Blue Book to set the base rate of a car’s value. Loan payouts may be as low as a few hundred dollars or thousands.

Next, the loan representative looks at your income and your ability to make loan payments. By combining the vehicle’s value and your income, a loan rep is able to come up with a reasonable loan amount that provides you with an affordable repayment amount.

Title Loan Requirements in Kansas

Each title lender may have their own set of title loan requirements in Kansas for car title loans such as the examples listed below. Most lenders require that you are old enough to enter into a contract, own a vehicle, have some sort of income and have no liens against the auto to be used for collateral.

A vehicle title listing you as the owner.
Proof of your age with a state identification card or your driver’s license to confirm you are 18 or older.
The vehicle registration document.
A clear title showing there are no liens against the auto. Some lenders accept titles if a small amount is still owed on the auto.
Proof of auto insurance.
A utility bill to confirm your residency in the state.
Proof of income or recent paystubs to confirm you have the money to repay your loan amount.
References. Many title lenders ask for at least two or more references before approving loans.
A set of car keys to the vehicle used as collateral.
Vehicle inspection. Some lenders may require you to submit your auto for a quick inspection to verify it meets collateral standards.

Title Loan Laws in Kansas

Many states do not allow title lenders to operate in their state. If states allow title loans, each state may determine their own regulations, which lenders must abide by to conduct business in the state legally. Title loan regulations in Kansas are in place to protect consumer’s rights. According to Kansas title loan laws, lenders operating in the state of Kansas may not require borrowers to submit any additional types of collateral other than the vehicle being used to guarantee the loan.

Loan Agreements

Before approving a loan, title lenders and borrowers are required to draw up a formal loan agreement in print, which must include title loan regulations in Kansas. Loan agreements must include the following information:

The full name of the borrower, Social Security number, physical description, birth date, and address.
The identification number of the auto used as collateral and the license plate number.
A written description of the vehicle.
Lenders must note the identification number and the name of the issuing agency.
The name and the address of the title loan office.
The state bank commissioner’s name, address and telephone number for consumer complaints and questions.
The date when the contract is signed and executed.
A statement defining the borrower’s right to cancel the contract within two business days of the execution of the contract.

Kansas title loan laws also require the following statements to be included in all car title loan contracts to make sure customers understand title loan rules in Kansas.

Title loans are not intended for long-term financial solutions.
Title loans are designed for short-term purposes.
Renewing a loan will result in additional interest charges.
Borrowers should understand title loans fall into the high interest category.
Consider other options or loans, which cost less to finance.
Vehicles may be repossessed if you fail to repay the loan.
According to title loan laws in Kansas, borrowers have the right to rescind the agreement. This means a borrower can cancel the contract and return the funds without additional costs.

Lender Loan Terms

In addition to the title loan rules in Kansas, listed above, lenders may provide a number of other important loan terms in the agreement such as:

Applicable fees.
The total cost of the loan.
The interest rate and the cost of the interest.
Minimum payment amounts.
A repayment schedule.

Loan agreements are normally read and signed at convenient loan center stores by the lender and the borrower.

Maximum Loan Amounts

Since title loans in Kansas are completed using open-end credit lines, borrowers and lenders come to an agreement on the loan amount. Whatever amount you agree upon is the maximum loan amount.

Interest Rates

There are no APR limits for title loans in Kansas. Lenders and buyers must agree to the APR set in the loan agreement.

Fees

Cash advance fees may be applied by lenders. There are no restrictions to the number of fees that can be charged. Lenders can charge as much as 5 percent on a late payment or a total of $25. Borrowers may pay the lesser of the two options.

Repayment Periods

Borrowers have 30 days to repay title loans in Kansas.

Defaulting on a Loan

According to the Office of the State Bank Commissioner, lenders may legally repossess autos used as collateral. They may sell a borrower’s auto if a loan should go into default, so long as they provide notice of the customer's right to cure the unpaid balance on the loan.

Lenders shall provide a consumer with a notice 10 days after they default on the loan. Consumers have 20 days to cure the default or risk having their vehicle repossessed.

Title Loan Rules in Kansas

Title Loan Extensions

Title loans can be extended for two additional periods of 30 days each providing the lender and borrower are both in agreement. Borrowers are responsible for paying all accrued interest up to the extension date before the next loan starts. Interest rates may not exceed the interest rate charged in the first loan agreement.

New Title Loan Agreements

Borrowers cannot legally obtain another title loan with the same lender for 60 days after the previous extension or loan has been paid off.

Early Payoffs

Borrowers are entitled to pay off loans early at any time. Kansas title loan laws do not allow lenders to charge fees or penalties to customers when paying off a loan early.

Auto Sales

In the event, the customer defaults on the loan and the auto must be sold, borrowers can receive the balance of the sale amount if there is any money left. Lenders may legally take out the amount owed on the loan, interest costs, miscellaneous fees and the cost of selling the vehicle and attorney fees.

Kansas Title Loan Repossession Laws

Vehicles can be repossessed in Kansas if you used your auto as collateral for a legal transaction such as a car title loan and fail to meet the terms of the loan agreement.
Most title lenders include a statement in their loan agreements about repossessing vehicles if you should fail to make your payments.
Kansas title loan repossession laws state that repo agents may not use force or violence to repossess vehicles.
Repossession agencies or agents are not required to provide notification before taking your vehicle.
Lending companies in Kansas are not required to have a court hearing to have autos repossessed.
Kansas title loan repossession laws require lenders to notify borrowers by mail after vehicles are repossessed to give them the option to satisfy the outstanding amount due on the loan.
Repossession laws allow lenders to sell repossessed vehicles at auctions.
Lenders are responsible for notifying borrowers of the sales amount received at auction and the current balance amount on their loan.
If the auction price received is not enough to satisfy the loan costs, lenders can legally collect the shortage from loan customers.

Before Taking out a Loan

Car title loans may require less documentation and are easier to get than other types of traditional loans. However, by signing a contract, you are still responsible for repaying the loan amount. Title loans may seem like an easy solution to financial problems at the time, but you are still responsible for paying back the principal, fees and interest.

Potential borrowers considering a title loan should take the time to read the terms of their legal agreement. Make sure you feel comfortable with repaying the loan by the due date. It is not unusual for some borrowers to get into financial difficulties with car title loans because they fail to make their payments.

Title Loan Applications

To attract as many potential borrowers and make the loan process as simple as possible, title lenders keep loan applications to a minimum. Most applications only require a small amount of contact and vehicle information to begin the loan process. The majority of title lenders do not charge for loan applications. If you are interested in applying for a title loan, you may need the following information:

Your full name, home zip code, telephone number or an email address.
The age, make, model and body style of your auto. Lenders usually require a vehicle mileage estimate for determining loan amounts.

Some title lenders may only operate with online applications, but most lenders also allow you to apply over the telephone or fill out an application at one of their loan stores.

How the Title Loan Process Works

The Application

Unlike banks, which have long applications, title loan applications are short and easy to fill out. In most instances, you can complete an application within a few minutes. Some title lenders offer instant loan estimates shortly after applying. They provide free loan estimates as a courtesy to their customers, so they are not kept waiting to learn how much money they could receive. In most situations, you are under no obligation to continue with the loan process if the loan amount is not what you expected or helpful to your financial situation.

Loan Consultations

To keep the process moving, applicants receive a phone call from their loan representative shortly after submitting an application. You are free to discuss all aspects of the loan process. Your rep will provide you with an overview of how the entire loan process works.

It is highly advisable to have your total monthly income and your monthly expense figures on hand when discussing the loan. Most loan reps will want to discuss your income to qualify you for the loan. However, there are some lenders that do not include income as a requirement for the loan.

If the lender you have chosen to do business with requires income, there are a number or acceptable income sources, which could qualify. Most lenders accept:

Income from a part-time or full-time job.
Social Security benefits.
Pension benefits.
Retirement income sources from investments.
Disability benefits.
Alimony.
Self-employment income.
Income from sales commissions.

Regardless of whether you qualify on income, you will most likely be given a choice of repayment plans. Even if your loan representative counsels you on repayment plans, it is up to you to decide the best course of action for repaying the loan. Some lenders may be able to get better interest rates, which can help to keep loan payments lower. If you cannot find a plan that fits well with your budget, some lenders have been known to customize a plan tailored to your income and expenses.

Keep in mind that most loan consultations provided by title lenders are also free of charge. However, working with a loan representative gives you the opportunity to ask questions and learn important details about the loan. At this point you can still pass on the loan opportunity if you decide the loan is not right for you.

Contracts

Approved borrowers usually meet with their loan rep at a convenient loan store location to review their contracts and sign them. At this time, they are responsible for turning over the paper car title to their vehicle to secure the loan and meet the collateral loan requirements.

Payouts

Many people collect their loan funds at the loan center store after signing their agreement. However, some title lenders also offer electronic fund transfers to checking or savings accounts. Additionally, a few lenders have also been known to offer mobile loan delivery services where they bring your loan funds to you.

Title Loan Advantages

No credit checks.
Fast loan funds in 24 hours or less.
No early payoff fees or charges.
Loan funds may be spent on any purpose determined by the borrower.
Most lenders have no driving restrictions and offer free use of your car during the loan period.
Convenient loan stores, which are often open seven days a week.
Some title lenders do offer competitive interest rates.
Easy qualifying.
Convenient online applications.

Disadvantages of Title Loans

Some lenders may impound your vehicle during the loan term. This can be a considerable disadvantage if you have no other form of transportation.
Autos can be repossessed and sold if you fail to meet the terms of your contract.
If you should default on a loan, it may be reported to any of the three major credit bureaus, which negatively affects your credit score.

Title loans can be a great option for those people that handle money responsibly and know their financial limitations. Before applying for a car title loan, take the time to learn about Kansas title loan laws and Kansas title loan repossession laws. Decide whether a title loan is your best option, and make sure you get clarification on any part of the loan agreement that you do not understand.